Please identify which of the basic Cs of lendingcharacter, capacity, cash, collateral, conditions, and controlapplies to each
Question:
Insurance coverage......... Asset liquidation
Competitive climate for customer’s product. Inflation outlook
Credit rating .......... Adequate documentation
Corporate resolution......... Changes in accounting standards
Liquid reserves......... Written loan policy
Asset specialization......... Coverage ratios
Driver’s license......... Purpose of loan
Expected market share.. Laws and regulations that apply to the making of loans
Economists’ forecasts......... Wages in the labor market
Business cycle ......... Changes in technology
Performance of comparable firms ...... Obsolescence
Guarantees/warranties ......... Liens
Expense controls ......... Management quality
Inventory turnover ......... Leverage
Projected cash flow......... History of firm
Experience of other lenders......... Customer identity
Social Security card......... Payment record
Price-earnings ratio......... Partnership agreement
Industry outlook ......... Accounts receivable turnover
Future financing needs......... Accounts payable turnover
Liquidation
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due....
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Related Book For
Bank Management and Financial Services
ISBN: 978-0078034671
9th edition
Authors: Peter Rose, Sylvia Hudgins
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